USDA’s Glauber: 2014 Corn Acres Seen at 92 Mil., Soybeans at 79.5 Million

Figures higher than the baseline projections issued last week as Glauber signaled

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U.S. corn plantings are expected at 92 million acres and soybean plantings at 79.5 million acres, according to figures presented by USDA Chief Economist Joe Glauber at the 90th USDA Annual Outlook Forum.

"Corn and soybean acreage is expected to total 171.5 million acres, about 400,000 less than in 2013," Glauber said. "Stronger soybean prices relative to corn should favor soybean plantings this year. The soybean to corn futures price ratio for fall 2014 delivery has been at 2.5, which favors soybeans. We project that corn area will fall to 92 million acres, a decline of 3.4 million acres from 2013 levels. Soybean acreage is projected at 79.5 million acres, up 3 million from 2013. Smaller SRW wheat plantings and lower soybean prices will likely reduce soybean double cropping in 2014."

Those figures reflect a shift from USDA’s baseline projections that were issued last week and used the November Supply/Demand data as a starting point. Those projections showed expectations for corn planting in 2014 of 93.5 million acres and soybeans at 78 million acres. However, that baseline assumed a continuation of the 2008 Farm Bill programs, including the Average Crop Revenue Election (ACRE) program which pays farmers based on planted acres. That program was likely to deliver a payment to many corn farmers given the downturn in prices.

However, the figures today released by Glauber reflect USDA’s views relative to the Agricultural Act of 2014 which pays farmers on base acres, not planted acres, via the Ag Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. "Since both the PLC and ARC programs are based on producers’ base acres rather than on their actual planted acres, the programs will likely have limited impact on acreage decisions," Glauber stated. He also labeled the program options facing farmers as "complex" relative to the new farm bill.

Other highlights from Glauber on 2014 prospects:

U.S. planted area for the 8 major row crops is expected to decline only slightly in 2014. Total planted acreage to corn, wheat and soybeans is projected to be 227.0 million acres, a decline of 1.1 million acres, mostly reflecting a decline in Soft Red Winter (SRW) wheat seedings last fall.

Winter wheat seedings were reported at 41.9 million acres, down 1.2 million from last year. Spring wheat seedings are expected to be 13.6 million acres, about 500,000 acres higher than last year due to fewer expected prevented plantings.

Cotton prices which are expected to fall less than competing crops will make cotton plantings relatively more attractive, resulting in higher cotton acreage in 2014. Cotton area is projected at 11.5 million acres, an increase of 1.1 million acres.

High rice prices will encourage some expansion. Rice area for 2014 is projected at 2.9 million acres, up 400,000 acres from 2013. Most all of the expansion is expected to occur in the Delta States where producers will expand long grain plantings, as well as plantings of middle- and short-grain varieties to offset potential acreage losses in California due to the drought.

Prices for most row crops are expected to fall to the lowest levels since 2009/10.

A return to normal yields for spring-planted crops could see soybeans and corn set new production records. Larger corn, soybean, rice and cotton crops will result in significant stock building and lower crop prices.

Most crop prices are expected to fall to the lowest levels since 2009/10.

Wheat prices are estimated at $5.30 per bushel, a decline of 22 percent from last year.

Corn prices are projected to fall to $3.90 per bushel, a decline of $0.60 per bushel and the lowest season average price for corn since 2009/10.

Soybeans prices are forecast at $9.65, per bushel, also the lowest season average price since 2009/10.

Rice prices are forecast at $15.90 per hundredweight for 2014/15, basically unchanged from 2013/14.

Cotton prices are projected at 68 cents per pound, a decline of 8 cents per pound from 2013/14 and the lowest level since 2009/10.

Because of continued tight ending stocks, markets will likely remain sensitive to supply shocks both in the United States and abroad.

Comments: Glauber signaled the acreage expectations delivered today would be different than those in the baseline relative to corn and soybeans as USDA had estimated the ACRE program in particular would attract corn acres in 2014. Now the attention will shift to the detailed supply/demand data that USDA analysts will deliver tomorrow.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.